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The state’s top utility regulator expressed deep doubts Tuesday about
Energy Secretary Rick Perry’s proposed rule to fortify the national
electric grid’s “resilience” by providing cost recovery for coal and
nuclear power plants.

Ted Thomas, chairman of the Arkansas Public Service Commission, made
his remarks in a question-and-answer session after delivering the
keynote address at the Arkansas Advanced Energy Association’s annual
meeting and policy conference in Little Rock.

Thomas said Perry’s rule-making proposal before the Federal Energy
Regulatory Commission is unnecessary because America’s electricity
supply has already been deemed reliable, and that the move won’t save
coal jobs because, by the Department of Energy’s own study, coal-fired
electricity has lost ground in the market to cheaper power generated by
natural gas.

“If it’s a gas problem, then the way to solve it is to ban fracking
if you want to bring coal miners back to work,” said Thomas, a lawyer
and former state lawmaker who was state budget director under former
Gov. Mike Huckabee. “When the DOE grid study came out, I was relieved
because it said the main culprit in the struggle that coal is having is
natural gas, and I had said publicly that anybody who believed otherwise
probably believes Elvis is still alive.”

The crowd erupted in laughter, but Thomas turned serious, calling the
DOE study and the proposal Perry derived from it inconsistent. FERC
members like Rob Powelson, a former Pennsylvania public utilities
commissioner, have directed pointed criticism at the plan. “I did not
sign up to go blow up the markets,” Powelson said this week, to which
Perry replied that “there is no free market” for electricity.

Thomas, who was appointed to the PSC by Republican Gov. Asa
Hutchinson, described the DOE’s plan as a way of picking sides. “What we
have is a proposal that takes … a fuel-neutral policy and turns it into
one where we’re picking winners, even though yesterday the EPA
administrator was quoted as saying we’re not going to pick winners,”
Thomas told the AAEA, a trade group made of renewable energy and
efficiency businesses and allies. “This program picks winners, but it
also performs a shift, saying that it’s renewables that cause the
problems for coal when the DOE study found that it was gas. What they’re
doing is choosing coal and nuclear over gas and renewables.”

Supporters of the proposed rule argue that coal and nuclear
generators could fill any gap caused by potential problems with natural
gas supplies, and can keep running when renewable sources are
unavailable.

However, critics say that coal has already been effectively defeated
in the market, and that the plan is basically a subsidy for the coal
industry. Perry himself has compared his rule with Obama administration
efforts to spur renewable energy advances, saying the previous
administration “had their thumb on the scale at the great detriment to
reliable baseload industries” that are crucial to the nation’s energy
security.

In a somewhat related development, the Trump administration last week moved to rescind Obama’s Clean Power Plan,
which sought to limit carbon releases by the energy industry and had
been challenged in court by Arkansas Attorney General Leslie Rutledge.
Rutledge hailed the widely expected announcement by Scott Pruitt,
administrator of the Environmental Protection Agency, but environmental
groups were outraged. Glen Hooks, director of the Arkansas chapter of
the Sierra Club, said the decision proves that Pruitt cares more about
“propping up the dirty fossil fuel industry” than about Americans’
health.

Hooks noted that the market in Arkansas and elsewhere had already
turned against the use of coal for electricity generation, and said the
job-creation potential of renewable energy makes the quest for
resurrecting coal industry jobs irrational. “Pruitt is not just ignoring
the deadly cost of pollution, he’s ignoring the clean energy deployment
that is rapidly creating jobs across the country and right here in
Arkansas,” Hooks said. The state’s utilities are “importing hundreds of
megawatts of wind energy while also constructing multiple solar energy
plants.”

Katie Niebaum, executive director of the AAEA, said that in just six
years, her organization had grown to more than 80 members, with
businesses and organizations representing 25,000 jobs and $2.8 billion
in annual sales.

In Tuesday’s discussion, Thomas also said the Trump administration has altered the terminology of the grid reliability debate.

“They’ve invented a new term that folks are trying to figure out
exactly what means, and that term is resilience,” as opposed to
“reliability,” Thomas said. He noted that engineers with the North
American Electric Reliability Organization had found that the current
system is “sufficiently reliable,” but that its engineers’ judgment had
been supplanted by voices “saying we need to elevate the standard so
that we can charge more money and give it to coal and nuclear”
generation.

“I don’t think that we should second-guess engineers in what is fundamentally an engineering business,” Thomas concluded.

AAEA Honors Morris Jenkins, Gerardo Galdamez

The PSC chairman’s remarks came after a flurry of policy conferences
and awards presentations by the AAEA, which honored Morris J. Jenkins as
the recipient of the Ron Bell Advanced Energy Leadership Award.

The Ron Bell award goes each year to a business leader, researcher or
public servant for outstanding contributions to the cause of advanced
energy in Arkansas.

Jenkins, who retired in 2015 after 41 years of service to the state,
was director of the Arkansas Energy Office from 1987 to 1998. Later he
was director of strategic planning and legislative liaison for the
Arkansas Economic Development Commission. A Pine Bluff native, he is a
graduate of the University of Arkansas at Fayetteville.

Other finalists for the award included Bill Harrison, CEO of Harrison
Energy Partners; Chris Ladner, a founding parter of the sustainability
and energy services company Entegrity and owner of Home Energy Rx; and
Frank Mayfield, a former vice president of Harrison Energy Partners and
an advanced energy advocate for 35 years.

The association also honored Gerardo Galdamez of Entergy Arkansas as
the winner of its Rising Star Award, and Entegrity as its Business
Innovation Award winner.

Galdamez, a New Orleans native and first-generation American, earned a
mechanical engineering degree at Tulane University and a master's
degree in business administration at the University of Arkansas at
Little Rock. He joined Entergy in 2011 and helps manage the company’s
nationally recognized efficiency portfolio.

Founded in 2007, Entegrity has grown to more than 70 professionals
working in Fayetteville, Memphis, Little Rock, St. Louis, Denver and
Jackson, Mississippi.

The AAEA used the conference to showcase its priorities of supporting
solar and other renewable power before the PSC, promoting
energy-performance contracting and public utility energy efficiency, as
well as backing innovative advanced energy finance programs like PACE.

One of the sponsors of the conference was Ygrene Energy Fund, one of
the nation’s leading PACE financiers and one that, coincidentally,
announced a major acquisition on the same day as the AAEA event. Ygrene
has acquired Energy Equity Funding LLC, a pioneer administrator of
commercial PACE lending. The combined operation will be based in St.
Louis.

Byron DeLear, the former CEO of Energy Equity Funding and now
managing director and central regional executive for Ygrene, spoke at
the AAEA event, held at the Hilton Embassy Suites on Financial Centre
Parkway.

DeLear said that PACE financing had provided some $4 billion for
150,000 projects nationwide, and that about 90 percent of that total was
devoted to residential projects. Arkansas’ PACE programs are
exclusively for commercial projects, something that advocates would
eventually like to change.

“There are now three states with active PACE residential programs,
California, Florida and Missouri,” DeLear said. “My home state of
Missouri leads the entire Midwest in clean energy job growth, adding
13,000 jobs in 2015-16 and growing at 8.3 percent a year.” He said the
American Council for an Energy-Efficient Economy had specifically
recognized the role of PACE financing in that growth.